Curve Finance is the backbone of DeFi’s stablecoin infrastructure. Its specialized AMM design enables ultra-low slippage swaps between pegged assets, while its tokenomics have spawned an entire ecosystem of “Curve Wars” where protocols compete for liquidity. Understanding Curve is essential for serious DeFi participants.
What Makes Curve Special
Curve’s StableSwap invariant is specifically designed for assets that should trade at similar values:
- Stablecoins: USDC/USDT/DAI
- Wrapped assets: ETH/stETH, BTC/wBTC
- Synthetic assets: Various pegged tokens
The veCRV System
Curve’s governance token (CRV) becomes powerful when locked as vote-escrowed CRV (veCRV):
| Lock Period | veCRV Received | Boost Multiplier |
|---|---|---|
| 1 year | 0.25 veCRV per CRV | Up to 1.625x |
| 2 years | 0.50 veCRV per CRV | Up to 2.0x |
| 4 years | 1.00 veCRV per CRV | Up to 2.5x |
Key Takeaways
- Curve dominates stablecoin and pegged asset trading
- veCRV holders earn fees and direct gauge emissions
- Convex has aggregated most veCRV voting power
- LP yields depend heavily on gauge weight and boost
- Understanding Curve Wars is essential for yield optimization